All posts by David Dayen

Pre-Fourth Open Thread

A few things of interest as we head into the holiday weekend:

• That mortgage legislation that I noted passing the Assembly yesterday was quickly taken up in the Senate (there were some amendments in the Assembly bill so concurrence was needed, and it passed easily (the vote was 32-8).  The legislation will now be sent to the Governor and there are indications that he will sign it.  Because of the 2/3 vote it received, most of its provisions will take effect immediately.  It’s a decent first step but it had better not be the last.

• The new Cook Report ratings are out, and among the slew of seats where Democrats are gaining, one race in California has shifted:

CA-46    Dana Rohrabacher    Solid Republican to Likely Republican

That’s pretty big news.  Charlie Cook’s report is widely read by insiders, and clearly they are taking notice as to the strength of Debbie Cook’s campaign.  Joe Shaw, communications director for Cook’s campaign, calls it “the first Orange County congressional race to be considered competitive since Congresswoman Loretta Sanchez’s 1996 race against incumbent Bob Dornan.”

• In CA-04, Charlie Brown announced a whirlwind schedule for the 4th of July, participating in events in King’s Beach, Lincoln, Roseville, Grass Valley, Auburn, and Alturas.  Tom McClintock must have seen that and scrambled up on the plane from his Thousand Oaks redoubt, because he hastily scheduled a couple campaign events.  In fact, the two candidates will be in the same parade in Lincoln.  That should be fun.

Exclusivity Argument Goes Up In Flames

The main talking point that, in particular, Dianne Feinstein and Nancy Pelosi have used to claim the necessity of the FISA capitulation is that under this law, the FISA Court will be the “exclusive means” for electronic surveillance.  The bamboozlement here is that FISA, a federal statute, never was the exclusive means before.  Now we have confirmation of this, from a federal judge in California no less.

A federal judge in California said Wednesday that the wiretapping law established by Congress was the “exclusive” means for the president to eavesdrop on Americans, and he rejected the government’s claim that the president’s constitutional authority as commander in chief trumped that law.

The judge, Vaughn R. Walker, the chief judge for the Northern District of California, made his findings in a ruling on a lawsuit brought by an Oregon charity. The group says it has evidence of an illegal wiretap used against it by the National Security Agency under the secret surveillance program established by President Bush after the terrorist attacks of Sept. 11, 2001 […]

But Judge Walker, who was appointed to the bench by former President George Bush, rejected those central claims in his 56-page ruling. He said the rules for surveillance were clearly established by Congress in 1978 under the Foreign Intelligence Surveillance Act, which requires the government to get a warrant from a secret court.

“Congress appears clearly to have intended to – and did – establish the exclusive means for foreign intelligence activities to be conducted,” the judge wrote. “Whatever power the executive may otherwise have had in this regard, FISA limits the power of the executive branch to conduct such activities and it limits the executive branch’s authority to assert the state secrets privilege in response to challenges to the legality of its foreign intelligence surveillance activities.”

Idiots, idiots, idiots.  In the course of giving away massive new surveillance powers and immunity for lawbreakers, the so-called “chip” that they received in return was already in the law to begin with.  Remember that exclusivity was DiFi’s amendment, and Pelosi said it was “the most important” aspect of any new law.

(By the way, this lawsuit is against the federal government, not the telecoms, so it would continue regardless of the outcome of Tuesday’s vote.)

Density Comes To California

Via Matt Yglesias and Atrios, the city of Sebastopol is thinking about supporting increased density in their upcoming development plans.

The Sebastopol City Council kicked off deliberations of a controversial redevelopment plan Tuesday with a majority of members voicing support for higher-density buildings as the most environmentally sound approach.

“Density is what makes transit feasible, giving us the option of getting out of our cars,” said Councilman Larry Robinson […]

The redevelopment plan would allow 300 residential units and nearly 400,000 square feet of new business and civic space between the Laguna de Santa Rosa and downtown.

Supporters have said the plan encourages the most environmentally sound method of development and would help add economic vitality to the city.

This approach is not without critics.  There remain those who consider tall buildings an urban blight, think that all development comes with traffic woes and want to maintain local “character” when talking about growth.

The point here is that we have to start to re-orient to a different kind of lifestyle.  If basic necessities are within walking distance and a strong transit spoke can build out from denser development, the traffic problems are eliminated, the quality of life goes up, and people can get around and get to work without the need for their cars.  Santa Monica is a pretty dense city, with several points of interest and commercial shops within walking distance and a strong bus system.  It’s not Manhattan and it doesn’t have to be.  But there’s less of a reliance on the automobile, and ultimately reducing that reliance is the key to making us energy secure.

The alternative is areas like the Inland Empire, where runaway sprawl and persistent construction of single-family homes is not only unsustainable, it’s unaffordable, as the mortgage crisis and soaring energy costs turn these developments into ghost towns.  With 200 dollar-a-barrel oil on the horizon, urban planning simply cannot retain the status quo and expect to survive.  There isn’t one complete answer here – telecommuting and Internet delivery, increased mass transit (I can’t wait for my subway to the sea), and density will all play a role.  But we cannot sacrifice any of those options in the name of NIMBYism.  

Mortgage Legislation Passes Assembly – What’s In It?

Yesterday, the Assembly passed SB 1137, which would alter the mortgage industry in California and aid those in danger of losing their homes.  It got through the Assembly by one vote, with 10 Republicans voting with the Democrats.  The Senate will need to pass it again to conform to some amendments and then this will go quickly to the Governor’s desk.  As Frank Russo writes:

The bill that passed, SB 1137 is authored by Democratic Senators Don Perata, Ellen Corbett, and Michael Machado, and coauthored by Speaker of the Assembly Karen Bass and principal coauthor Assemblymember Ted Lieu, who presented it on the Assembly floor. It goes beyond federal laws and received broad support from consumer groups. The legislation requires lenders and servicers to: 1) contact borrowers (or engage in a prescribed process to do so) to schedule telephone or in-person meetings on restructuring options before beginning the foreclosure process, 2) requires a 60-day notice to be given to tenants of buildings facing foreclosure before they can be removed from a rental housing unit; and 3) allows fines of up to $1,000 a day for owners of foreclosed properties that fail to adequately maintain them.

I like aspects of this legislation, particularly the steps toward removing blight in homes that aren’t properly maintained, which is a big problem in heavily foreclosed areas.  But this bill is a watered-down supplement to the raft of bills presented by Ted Lieu earlier this year, which would have really reformed the mortgage market.  There would have been enhanced regulation, limits to penalties for prepayment, a requirement to translate loan terms to non-English speaking customers (yes, that’s not current law), eliminate yield spread premiums (which rewarded lenders for getting their customers into higher interest-rate loans) and gotten rid of weasel language in mortgage documents like involuntary legal waivers.  Almost all of those bills were gutted to the delight of the lending industry.  What’s in its place is vaguely helpful to borrowers, but not at all the industrywide reform that is needed to ensure that a runaway market like we saw a few years ago will never be repeated.  Lieu modeled his reforms after those in North Carolina, where they work very well.  This was a case of the lobbyists getting a hold of legislation before it could actually do any good.

Here’s Ted Lieu’s statement (on the flip):

“Senator Don Perata’s SB 1137 sends a strong message that the California State Legislature will go further than federal law to address the mortgage foreclosure crisis. Recently and unfortunately, the Senate Banking, Finance and Insurance committee killed a comprehensive package of Assembly mortgage reform bills based on industry’s argument that California should do nothing other than conform to federal law. SB 1137 is a clear and stunning rejection of the ultra-conservative industry argument that California has no role other than to follow the federal government. This bill shows we will lead, not just follow, and that relying on the same federal regulators that failed us during the mortgage crisis is not an option.

“California was the hardest hit and therefore needs to be at the forefront of creating such a comprehensive plan. Such states as New York and North Carolina have already passed comprehensive mortgage reform. It is time we do more.

“Again, I would like to commend Pro Tem Perata on his recognition that sensible mortgage reform requires California to go further than federal law. SB 1137 is a solid first step, but we certainly need to do more to address adequately the mortgage crisis. The Assembly already passed a solid package of comprehensive reforms to the Senate. The ball is now in the California Senate’s court.”

Sen. Mike Machado was instrumental in getting industry’s back and gutting the most far-reaching aspects of the Lieu bills, and Democrats in the Assembly gave some payback by killing most of the legislation he offered this year.  Rather than an elementary school slap-fight, it’d be nice if there was some conviction from the leadership to go beyond the most cosmetic solutions and fight for their constituents.

Won’t Someone Think Of The Ballplayers?

Because of the OC Register, I hate being alive.  I hope they’re happy.

In a column from last week that would have escaped me if Jesse from Pandagon hadn’t seen it, Hank Adler decides that the best way to attack Barack Obama’s spending plan is to remind everyone what professional athletes will lose out of the deal.

It was fortunate for Tiger that his most-recent U.S. Open win occurred in 2008. Under twin tax proposals from Obama to 1) remove the “cap” from Social Security taxes for individuals earning over $250,000, a plateau Tiger has long since surpassed in 2008, and 2) eliminate the “Bush” tax cuts, thereby raising the top marginal federal income tax rate to 39.6 percent, Tiger’s taxes on his winner’s check would have increased to approximately $776,000, a boost of almost $190,000. Instead of Tiger keeping 57 percent of his earnings and the government taking 43 percent, under the twin Obama tax proposals, Tiger’s federal and California taxes would have amounted to 57 percent of his winnings, leaving Tiger with just 43 percent.

I know when California families are deciding between air conditioning or meat, when they muse about using a rickshaw to get to work because gas is as out of reach as gold, they are actually upset because they know Tiger Woods is being deprived of $190,000 out of the eleventy billion in his bank account.  What, his new baby has to get silver-plated starter clubs now instead of the expected gold?  Can you look yourself in the eye and say that doesn’t eat you up inside?

Adler continues:

Prefer baseball to golf?

The New York Yankees have a 2008 payroll of approximately $208 million. Under the twin Obama tax proposals, the 24 Yankee players would be hit with an aggregate increase in federal income taxes of just over $22 million, with slugger Alex Rodriguez single-handedly getting dunned with $2.6 million in additional federal taxes.

The owner of the Yankees would owe an additional $7.5 million of federal taxes. Ticket prices would need to be increased by about $65 million so that the owner and players could have the same after-tax income as before. The increase in ticket prices would amount to an average $16 per ticket. Given that the least-expensive ticket in Yankee Stadium currently is $14, this would more than double the cost of a seat in the bleachers.

Adler hit upon the two most sympathetic characters in all of sports, maybe all of Christendom, to single out as martyrs: Alex Rodriguez and George Steinbrenner.  Incidentally, with the Yanks 7 1/2 games out of first, I don’t think anyone’s going to feel too bad about them losing money.  Then there’s the part where Steinbrenner is entitled to his after-tax earnings and simply must fleece the hardworking fans, because the Yankees have no other revenue streams to speak of.

You can go on to dispute Adler by mentioning the top-level tax rate in 1960 (it was 90%), the tax rates under Clinton which Obama would restore and how that affected business (the largest peacetime expansion in history), etc., etc.  But someone with the insight to use the plight of enormously wealthy ballplayers to rally the middle-class public to his cause isn’t really worth the time.  Only the mockery.

Thanks Progressive Movement!

A lot of people are talking today about Sen. Obama’s stance against Prop. 8; it’s a recommended diary on Daily Kos.  We had this on Calitics two days ago and nobody noticed.  The Sacramento Bee reports on it and suddenly it’s on everybody’s lips.

I don’t begrudge the Bee writing about the issue; it’s newsworthy, and the result of a letter read to the Alice B. Toklas Democratic Club, not some secret.  I’m glad they picked it up.  But I’m very disturbed by the fact that progressive media is not supported to the point of being ignored, but when a dead-tree source goes with the same information it becomes a top story.  I expect that out of the traditional media, but not the blogosphere.  There is no question that Brian was the first person anywhere to report on Sen. Obama’s letter to the club.  And I can tell you that I did at least some behind-the-scenes work to promote the scoop to progressive media and blogosphere leaders.  Didn’t work.

I don’t care that the Bee didn’t report that Calitics was the first source to break this; would have been nice, but not totally necessary.  But could bloggers at least note that we had this two days before the traditional media?  If we aren’t self-reinforcing we’re never going to get anywhere.

Happy New Fiscal Year!

Congratulations, California!  It’s July 1, the start of the new fiscal year, and you don’t have a budget, again.  And if Mike Villines is to be believed, you won’t have one for some time:

“We’re doing meetings, but we’re not making a ton of progress,” Villines said on the final day of the 2007-08 fiscal year.

The four legislative leaders are meeting regularly, but “a lot of it is building a rapport.”

I hope they’re playing that “trust” game where one of them falls to the ground and relies on everyone else to catch them, that’s always a good one.  Maybe they could swing a team building trip to Joshua Tree while they’re at it!

According to Villines, those mean old Democrats are just irrationally sticking to raising taxes at a time of budget deficits between $15 and $20 billion dollars!  Don’t they know they could just stop funding public schools and everyone could go home for the summer? (over…)

In part, he blamed Democrats for sticking to a plan to raise taxes – $11 billion in the Senate and $6 billion in the Assembly – for stalling talks. He called such figures “totally unfounded and out of touch with reality.”

“We understand the budget is a compromise. Being in the minority, we understand that,” Villines said. “But we’re having a difficult time getting our counterparts to really change their original premise on the budget, which is, ‘We need taxes. We need to continue spending in government and that’s the budget that we want.'”

“I keep waiting for that to end so we can get to where we are seriously negotiating,” he added. “We haven’t gotten there.”

It’s funny that Villines claims he understands the budget to be a compromise, given that there are literally dozens of members of his caucus who have never voted for a budget in their political careers.

He also said that the Big Four has agreed to flatten out the corrections budget.  Funny, of all the things both sides choose to cut is the one program which is in such a crisis that we’re going to have a trial in November that will almost certainly lead to mass releases.  The failure of leadership on the prisons continues.

I also like Villines trying to make hay out of “Democrats not naming their tax hikes,” seeing that this was exactly the strategy Republicans tried last year, not naming their budget cuts once before eventually agreeing to a deal.  The hypocrisy, it blinds!

We know what the Republicans want to do.  They want to constrain spending so that it grows slower than the economy until it becomes so small they can drown it in the bathtub.  There’s nothing novel about it, it’s pure Norquistian conservatism, the same kind that we’ve seen fail the country during the Bush Administration.  As Dan Walters, believe it or not, said two weeks ago, “California’s voters, first by mandating two-thirds legislative votes on new taxes with Proposition 13 in 1978, and then guaranteeing schools a hefty share of current revenue and any new taxes with Proposition 98 in 1988, may have made it almost impossible to balance revenue and spending.”  They were sold a bill of goods by the Yacht Party’s con men, told they could have their low taxes and eat from the fruit of generous public services too.  Everyone now understands this is a sham, but snake-oil salesmen like Mike Villines are still trudging out to the fields with the bottles of “Dr. Turlingtons Balsam of Life” trying to sell it to the rubes.

And that, my friends, is why there’s no budget on July 1 again.  And this will continue to happen until the Yacht Party is made to pay at the ballot box.  Because the current laws make the state ungovernable, only a 2/3 majority that can reform the rules, so that the party in power can rise or fall on the results of the actions it is allowed to deliver, will ever provide what’s necessary for California to function and survive.

End Of The Quarter Push

I’m not going to be able to get to a House roundup today – probably later in the week.  But today is the last day of the 2nd quarter, an important milestone for all candidates, particularly challengers.  If candidates aren’t showing significant fundraising strength by the end of Q2, it’s not likely they’ll be able to get the institutional support they may need to compete against their incumbent opponents.  Here in California we know that we have at least a half-dozen Congressional Democratic challengers and a handful of state legislative seats which have the potential to be in play in November, given strong expected turnout and coattails from Barack Obama on the top of the ticket.  For those who think that California is hopelessly gerrymandered and there can’t possibly be any flips from one party to another, let me direct you to this quote from a spokesman for the NRCC, the electoral arm for Republicans in the House:

“This is a challenging environment,” she said. “Any Republican running for office has to run basically on an independent platform, localize the race and not take anything for granted. There are no safe Republican seats in this election.”

That’s true for California as well.  So I urge you to find your favorite Democrat, read up on them, and donate.  Your contribution will never mean more than today.  Calitics has an ActBlue page with some candidates listed, and you can get plenty of information by reading some of my past roundups.  But let me also direct you to some candidate’s websites:

Bill Durston, CA-03

Charlie Brown, CA-04

Russ Warner, CA-26

Jule Bornstein, CA-45

Debbie Cook, CA-46

Nick Leibham, CA-50

Hannah-Beth Jackson, SD-19

Alyson Huber, AD-10

Joan Buchanan, AD-15

Ferial Masry, AD-37

Marty Block, AD-78

Manuel Perez, AD-80

[UPDATE by Julia]  Let me add one more to that.  The Equality for All campaign is in the midst of an end of the quarter push as well.  There is a special Calitics ActBlue page for the marriage campaign.  They can use all the help they can get.

As I mentioned in the questions below.  Equality for All is the official “No on Prop. 8” campaign.  All 50 orgs that are a part of the coalition (including Courage Campaign, where I work) are coordinating their activities, volunteers, communication and media through Equality for All.

Oops! Somebody Read Arnold’s Record

When Arnold Schwarzenegger was tapped to be one of the guests on Tom Brokaw’s first episode moderating Meet The Press, I’m sure he thought it would be the same lazy, glorifying interview that he always gets from a national media that has no idea how he’s governing the state of California and simply knows him from his box-office receipts and magazine covers.  These were the principles that guided someone like Tim Russert, who wasn’t at all balanced when interviewing Republicans, and especially someone like Schwarzenegger, who let that slip in this rememberance of the late NBC host:

…Governor, you were the guest of Tim Russert several times.

GOV. ARNOLD SCHWARZENEGGER (R-CA): Several times, and he always did great interviews with a lot of humor, tough questions, but we had a great time, and I really miss him, I have to say that. And he was–I remember when I ran for governor, he called me, and he says, “If you make that, if you win, then I will take care of the rest.” And I said, “What are you talking about?” And he says, “I will get you to run for president. I will make sure that we change the Constitution.” Well, it never happened, but anyway, I miss him very much.

Nice role for a journalist, to assure politicians that he will personally interfere to amend the Constitution in their favor.

But Brokaw actually did his homework a bit, and the difference between a Russert interview and this one was evident in the very next question.

MR. BROKAW: When you ran for governor in 2003, you ran as a fiscal conservative who would change the system. You would bring businesslike techniques. Now you’re facing a $15 billion deficit here in California. Unemployment is running at about 6.8 percent. You’ve got the worst housing crisis since the Great Depression. If you were the CEO of a public company, the board would probably say, “It’s time to go.”

GOV. SCHWARZENEGGER: Are you always that positive?

Man, you have to see the video for the look on Arnold’s face when he realized this wouldn’t be a junket.  Priceless.

Inexplicably, Schwarzenegger defended his record by talking about how he “was able to bring Democrats and Republicans together.”  Hmm, I must have been asleep for the past several years when he managed that.

The rest of the interview goes downhill from there.  Evan Halper has a good recap.  Arnold must have been THRILLED when Brokaw moved on to the Presidential race.  It’s particularly amusing when he laments that politicians in Washington can’t get anything done.  That’s right, it’s just the politicians in WASHINGTON that are the problem.

Amazing how the tenor of the interview changes when the interviewer makes the bold step of being prepared.  Arnold never knew what hit him.

John McCain – California Tax Cheat

Lucas mentioned it in Quick HIts but this needs to be amplified.  Turns out that John and Cindy McCain are the same kind of irresponsible conservatives who are so unpatriotic they don’t believe the country (and in this case, this state) is worth paying for.

When you’re poor, it can be hard to pay the bills. When you’re rich, it’s hard to keep track of all the bills that need paying. It’s a lesson Cindy McCain learned the hard way when NEWSWEEK raised questions about an overdue property-tax bill on a La Jolla, Calif., property owned by a trust that she oversees. Mrs. McCain is a beer heiress with an estimated $100 million fortune and, along with her husband, she owns at least seven properties, including condos in California and Arizona.

San Diego County officials, it turns out, have been sending out tax notices on the La Jolla property, an oceanfront condo, for four years without receiving a response. County records show the bills, which were mailed to a Phoenix address associated with Mrs. McCain’s trust, were returned by the post office. According to a McCain campaign aide, who requested anonymity when discussing a private matter, an elderly aunt of Mrs. McCain’s lives in the condo, and the bank that manages the trust has not been receiving tax bills on the property. Shortly after NEWSWEEK inquired about the matter, the McCain aide e-mailed a receipt dated Friday, June 27, confirming payment by the trust to San Diego County in the amount of $6,744.42. County officials say the trust still owes an additional $1,742 for this year, an amount that is overdue and will go into default July 1. Told of the outstanding $1,742, the aide said: “The trust has paid all bills shown owing as of today and will pay all other bills due.”

Keep in mind, California Republicans want this type of tax-dodging for those who can most easily afford it to be the LAW.  They think it’s perfectly fine for wealthy yacht and private plane owners to avoid their taxes.

There’s also the question of whether people, who are so ridiculously wealthy that they forget about properties where their relatives are living for four years, can be credibly seen to be at all in touch with the concerns of the average American.